Bill C-25 (Historical)

An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act

Part 1 amends the Canada Business Corporations Act, the Canada Cooperatives Act and the Canada Not-for-profit Corporations Act to, among other things,
(a) reform some aspects of the process for electing directors of certain corporations and cooperatives;
(b) modernize communications between corporations or cooperatives and their shareholders or members;
(c) clarify that corporations and cooperatives are prohibited from issuing share certificates and warrants, in bearer form; and
(d) require certain corporations to place before the shareholders, at every annual meeting, information respecting diversity among directors and the members of senior management.
Part 2 amends the Competition Act to expand the concept of affiliation to a broader range of business organizations.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

I welcome Ms. Isabelle from Startup Canada.

I have to recognize that a majority of the board members of Startup Canada are women. I think, including the team, the majority of them are women. It's good to know that. I know that you are not women-focused only, but it still is good to see that a majority of the board members and the management team are women.

Before my question, I just want to mention that, today, 27% of the board positions across Canada are held by women—27%. That is up from 11% in 2014. In fact, among the TSX-listed companies, 30% of the board positions are held by women. It did not happen just like that. We did pass a bill in 2016, Bill C-25, where we asked the publicly listed organizations to mention their diversity policies in their annual statements to the stakeholders. I remember that I had to fight to get the definition of “diversity”. The bill did not mention it. Even now, the legislation does not mention the definition of “diversity”, but I think I compromised when the regulation identified that diversity includes women, indigenous people, visible minorities and people with disabilities.

Though 30% of the TSX-listed companies have women on the board, only 10% of the overall number of board members, including men and women, are visible minorities, and only 1%, including men and women, of all the board members are indigenous people. When you look at the 30% who are women and dig deeper.... We don't have the statistics for this, but I'm sure that the percentage of women belonging to visible minorities and indigenous people will be less than 1%, or a maximum of 1%. It may be 2% if you want to be very generous. There are still a lot of things that need to be done, and that is where we are going.

Ms. Isabelle, I have a couple of questions for you.

I have a small objection to one thing in your speech. Again, you come before the committee like many witnesses, saying, “We need more funds. We need more funds.” That is like a broken record, and it's in spite of the government's providing a record amount of funds to various programs for women entrepreneurship and women in business. In fact, part of your statement also indicated that the problem is not with the amount of funding that is made available. Forget the cuts that some of the political parties are proposing. The problem is not with the amount of funding that is available, because in part of your statement you also said that 56% of the women founders did not know that there were programs. The problem is not with the funds; it is with the knowledge, the education.

You also mentioned that they have problems with exporting. Let's talk about exports. Before joining politics, I was part of a small company, an export-oriented company. I know that part of your funding comes from EDC, if I'm not wrong. You should know that EDC has programs for small businesses, both women-owned and not. If they get the contract, I think 70% of that is getting funded by EDC. There are funds available. EDC has hundreds of millions of dollars available to fund exports. It is the education that is required for women entrepreneurs to take advantage of the funding that is available.

Now we come to my question. You mentioned helping women entrepreneurs in different sectors, different segments of the economy. Maybe I missed it, but you didn't mention the manufacturing sector. In general, the knowledge-based sector was very small, if I'm not wrong. Am I right?

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Chair.

Madam Chair, as a former member of Invest Ottawa, it's my pleasure to welcome Sonya Shorey to our committee. I was on the board of this economic development agency until I decided to enter politics.

Since we came to power in 2015 there's been a dramatic increase in the number of women in the top management positions in the Canadian corporate sector. It's not just that we shared the path with a gender-balanced cabinet; we also brought in Bill C-25, which asked the Canadian corporate sector, in their annual statements to stakeholders, to explicitly state their gender diversity policies. That, I think, stimulated the participation of more women in the corporate sector.

For example, today, 27% of the board members of the Canadian corporate sector are women, which is up from 11% in 2014. Today, 89% of the boards have at least one woman, compared to 49% in 2014. We have three or more women on 36% of boards, compared to 8% in 2014. In west Ottawa, I think, the majority—at least 50%—of the board members are women. I think in the number of employees at Invest Ottawa, women are in the majority, which is a good thing.

Ms. Shorey, I'll come back to you. I just have a quick question for Ms. Nakamura.

Ms. Nakamura, you said that women-owned businesses have gone up from 15.6% to 18.4%. Can you tell me what percentage of those are visible minorities or women from indigenous communities?

Enhancing Transparency and Accountability in the Transportation System Act

[Chandra Arya, Liberal, Nepean, ON]

Madam Speaker, the hon. member mentioned the requirement to disclose the diversity of boards of airport authorities and senior management. A few years back, we passed Bill C-25, which said that public corporations should disclose their diversity policies in their annual communications to stakeholders. In that bill, we delegated the responsibility to the minister to form regulations that defined diversity, which included indigenous people, women, visible minorities and people with disabilities. Does the member not think this could also apply here?

[Brian Masse, NDP, Windsor West, ON]

I am willing to bet they were asked to be at 25%, whether or not they were even offered 10%. I'm wondering whether legislative-wise.... Here's what I'm worried about. They have to come back here to look at altering the percentage. Is there a way, legislatively, we can give the minister the power to do that through regulation, and/or is there a way to allow the minister to go to 10% unilaterally, to start at 25% and go with that? That is my big concern.

I get the concept that you want to do something a little easier here. I listened very carefully to your response in terms of what the commitment was, what they were asking and who has advocated for what, but that's what I'm concerned about. We already wasted time with Bill C-25. Many of these things.... We had motions that were voted against on these very problems.

Is there a way for us to legislate some flexibility here that would allow the minister, again, to go down to 10% unilaterally through regulations and/or perhaps mandate a review of that every year, for example?

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I struggled with this a little bit too. We have a similar amendment. We're wanting to be, obviously, somewhat in line with others. At the same time, this is why I referenced Bill C-25. Its disastrous repercussion led us here to this day because the previous bill by then-minister Bains was so deficient. I think we can go with the 10% and I think we'll be fine. We're known so poorly, so this is catching up.

[Brian Masse, NDP, Windsor West, ON]

I want to thank my colleague and friend from the Bloc, Monsieur Lemire, for mentioning fraud, because I thought Bill C-25 was complete fraud. It made us look like we had legislation on the issue when, basically, we really didn't have anything effective.

What you're saying about the bill is don't let the opportunity pass, but at the same time, you would like to see other areas strengthened in the bill. We could do a little better. As we go through our clause-by-clause, we could keep that in mind.

Would you agree that there is probably room, internationally, to allow us to do that? We often hear as members of Parliament that we can't do this because of a trade agreement with whomever, or we can't do that because of other legal systems. We get that all the time. If we improve this bill, what's the context internationally for us ?

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm going to quote a couple of things from a February 28, 2017, Toronto Star article entitled “New law won't stop Canada being used for money laundering, tax evasion, critics say”. What hasn't been discussed a lot here is that this is actually our second attempt in recent years to deal with this. Bill C-25 was the first one. At that time, Minister Bains said it “would provide the foundation for a 21st-century marketplace. They will align Canada’s framework laws with best practices in jurisdictions around the world.” In my comments in that article, I said, “It’s a missed opportunity.... The message to the financial community is: ‘We’re taking a pass.’” I also said, “I think we’re going to get called out by the international community for this.... There are glaring holes in corporate accountability and transparency.”

My first question for you, Mr. Caldera, is this. Will we have the same reaction in passing this piece of legislation as it's currently written? Again, that was my problem with the previous one, Bill C-25. What is your opinion on this? Is it going to be a missed opportunity again, or do we have it right this time? Ironically, most of these amendments are things that actually got voted against when I tabled them for Bill C-25.

I'd like to hear from you on where we're going to be when this is done.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'll follow up on that vein, because it's an important issue that this committee actually dealt with before in Bill C-25. It looked at the Canadian Business Corporations Act and the inclusion of women and visible minorities on boards of directors in Canada. We went with a model of “comply or explain” for the boardrooms of Canada to report on, versus mandates or percentages.

Could we perhaps get an update on how we're doing in that regard? That was about four or five years ago with the former industry minister. I want to know where we are with that. It would be important to get an update, especially with March 8 coming up.

[Navdeep Bains, Liberal, Mississauga—Malton, ON]

I appreciate the opportunity to meet with you on this occasion, as you mentioned at the outset, with regard to the tabling of the 2019-20 main estimates.

It's my intention to share with this committee the details of the continued implementation of our government's innovation and skills plan. That's what's reflected in the budget, and the estimates as well.

My comments will be brief. I want to allow the maximum amount of time for questions.

However, before I go further, I'd like to thank this committee for its ongoing review of the Copyright Act as well as its invaluable efforts and reports on the Canadian manufacturing sector; innovation and technology; intellectual property and technology transfer—which was very helpful for us when we unveiled our first national IP strategy—and broadband connectivity, of course. Your committee has also studied Bill C-25 and Bill C-36, as well as Canada's anti-spam legislation. Long story short, Mr. Chair, our government greatly values these contributions. They have helped shape our innovation agenda.

We are well on our way to accomplishing our goals, but we know there is much left to do. That is why I am here today to discuss the proposed budget allocation of $8.6 billion in the 2019-20 main estimates for the ISED portfolio and to answer any questions that you may have. I am seeking your continued support as we advance the innovation and skills plan.

Allow me to provide some examples of what's in that budget, particularly in the main estimates.

One issue that's very important to us, and that many of you are aware of, is CanCode. To develop the digital economy, our CanCode program has helped more than one million students learn digital and coding skills. It's more than simply coding. It's about collaboration. It's about teamwork. It's about preparing young people for the jobs of tomorrow.

Budget 2019 seeks to provide an additional $60 million over the next two years. Because of that initial success, we've allocated additional funds to help another million young students gain new digital skills. It's not only about the kids; it's also about the teachers. We're empowering many teachers to learn how to teach how to code as well so they can provide additional opportunities for future generations.

Broadband is another area that's very important and that's come up often in the many conversations this committee has had, and of course in our travels across the country.

To ensure we have the infrastructure to put the skills to use, which I just highlighted with regard to CanCode, budget 2019 proposes $1.7 billion for high-speed Internet access.

I look forward to working with my colleague Minister Jordan to implement this funding. Our government is committed to this initiative. It complements the connect to innovate program that we launched a few years ago, and we were able to leverage a billion dollars' worth of support in total through that program.

The next item I want to talk about is superclusters.

We've supported the creation of five innovation superclusters. These superclusters will strengthen key sectors of our economy, which will attract international investment.

In doing so, these superclusters are building innovation ecosystems that bridge the gap from idea to commercialization to growing global firms. It's really about creating this ecosystem. I think you'll find this stat very important as well. Superclusters are expected to create 50,000 jobs and to grow Canada's economy by $50 billion over the next 10 years. This is really about growth and jobs, and about continued global leadership for Canada when it comes to our innovation economy.

Complementing this initiative, we are providing new sources of capital for large-scale innovation projects, as well. One such project that is very important to highlight, and that impacts many of our communities, is the strategic innovation fund, SIF. Through the SIF, we have announced contributions of $1.2 billion, leveraging investments of $15.3 billion. We not only are making these investments but also have seen significant leveraged dollars. We're expected to create, again, tens of thousands of jobs. These range from, of course, the automotive sector, which is very critical to our economy, to the aerospace sector to food processing to digital technologies.

If you're counting, that's more than 100,000 jobs from just those two initiatives. I'm talking about superclusters and SIF. I just wanted to highlight some of those key initiatives in my opening remarks as well.

I also want to take this opportunity to talk about the recently launched digital charter, which is central to the next phase of our innovation and skills plan. Under the digital charter, individual privacy and business innovation are complementary, not competing, priorities. This approach supports an environment in which business models that rely on leveraging data for growth put an even bigger premium on trust. This is really about creating and building trust in the digital world. Trust and growth should be mutually reinforcing principles. You can't have one at the expense of the other.

Our government's investments under the innovation and skills plan are working. Since October 2015, Canada's economic growth has led the G7 and unemployment is at a record low.

By building on Canada's competitive advantages—the most highly educated workforce in the world, unrivalled access to global markets and low costs for doing business—companies are growing in Canada, coming to Canada and investing in Canada.

Let me give you a quick snapshot. I'm an accountant; I like numbers. In 2018, we saw the highest levels of venture capital investments since the early 2000s. It was $4.6 billion. That's clearly an indication of how we're turning a corner. We're seeing additional investments—particularly late-stage investments—in companies that are scaling and growing. Foreign direct investment grew by nearly 60% as well, which is really important to know.

We're seeing nearly twice as many Canadian companies on their way to the billion-dollar mark, which is a true sign of global competitiveness. We call them unicorns. How do we create more Shopifys? How do we create more large-scale companies that are growing and creating jobs? Right now, we have 20 in the pipeline that are well on their way to doing that.

Canada has become one of the world's best places to live and do business. We saw that recently at two conferences. Collision in Toronto and C2 Montreal highlighted again how the world is coming to Canada to take advantage of all the opportunities here.

Our world-class workforce and cutting-edge infrastructure is attracting investment and opportunities.

Our government is committed to building a strong and innovative economy that benefits all Canadians.

Once again, I thank this committee for its work and for giving me this opportunity to speak today.

I'm happy to answer any questions you may have.

[Maryam Monsef, Liberal, Peterborough—Kawartha, ON]

That's a great question, Irene.

The fact that only one in five seats is filled by a woman in Canada's wealthy corporate boards is a shame. It also affects our economic opportunities and competitiveness.

So, we introduced a comply and explain model through Bill C-25. Parliament supported it wholeheartedly. We introduced that bill in the understanding with corporations that if we were not able to see results, we'd be willing to take further steps.

The recent data isn't showing much improvement. I'd be interested in seeing your bill, Irene, and wrapping my head around it.

Justice

[Maryam Monsef, Liberal, Minister of International Development and Minister for Women and Gender Equality]

Mr. Speaker, we reject entirely the premise of that question. What I would like to know, and what those 338 young women want to know, is why the Conservatives voted against the funding to bring them here to Ottawa, why they voted against funding to support women entrepreneurs and why they voted against funding to ensure that Canadians across the country have opportunities to sit around decision-making tables through Bill C-25. Our record speaks for itself; so does theirs.

Budget Implementation Act, 2018, No. 2

[Majid Jowhari, Liberal, Richmond Hill, ON]

Madam Speaker, I have the honour and privilege of serving with my colleague from Guelph on the INDU committee, as well as in regard to our joint initiative on mental health.

The hon. member is quite correct. When we were studying Bill C-25, the topic of ownership, specifically by women, came up in the study. We realized that whenever there is fair representation of females, corporations on average perform in the neighbourhood of 30% better. We welcome Bill C-25 and also the measures in this act that support female participation in corporate structures, as well as making sure we have proper representation.

[Lloyd Longfield, Liberal, Guelph, ON]

Madam Speaker, it seems that New Democrats think we have too many pages in our budget and that we are doing too much for Canadians. I hear the Conservatives saying that we should not be investing in our economy and should focus on limiting our vision for Canada. This bill reflects the complexity of the challenge of making Canada fairer and the economy work for all Canadians. During the INDU committee's studies, the committee looked at Bill C-25 and the composition of boards. It also looked at beneficial ownership to try to make sure that women can participate on boards and in management. Other parts of the budget bill are supporting women in business.

Could the hon. member comment on the importance of proper governance so that women have a fair chance in our economy?

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, gentlemen. It's been a circus here, and I appreciate your patience.

I've had a high degree of interest in this, having come through a bill I championed, which was recently defeated, on single-event sports wagering. The United States has moved ahead with this in a 6-2 decision and will now, basically, be a bastion for organized crime related to sports betting and also a flag-bearer for nefarious offshore operations that will receive Canadians participating in their operations.

One of the things that is clear about some of the work we did on Bill C-25, with regard to beneficial ownership, is that Canada is considered a laggard in terms of its international reputation for dealing with beneficial ownership. I do want to say, though, for the record, that in terms of public and private disclosure, it's interesting that you can, with that corporate number, ask for the public to subsidize you for everything from your entertainment business expenses to writeoffs, a series of different things, but you don't actually have to disclose ownership of it. You get all the benefits of the public subsidy, being tax deductions, but you don't have to actually disclose what it is that you are....

I would like your comments. What would be the criminal reasons for not wanting to actually provide that public identity?

[Vanessa Morgan, Board Chair, Soulpepper Theatre Company]

Thank you for the opportunity to share my views with you today. I commend the standing committee for looking into the issues of gender parity in arts and cultural organizations.

I'll give you little background on me. I run an investment management company in Toronto and have been involved as a board volunteer with social service and arts organizations since the 1990s. I've been on the Soulpepper Theatre Company board since 2011, was appointed as the chair-elect last November, and took over officially this February.

Personally, I have experienced no barriers in joining boards, but I am president of a charitable foundation that happens to donate a fair amount of money in the province of Ontario, particularly to arts organizations, so the organizations like to try to keep me and others like me engaged. It's a perspective that's different from other people's.

I do find that in terms of lack of inclusion it's worse in the corporate world. I think the arts and cultural sector is ahead of other industries in terms of gender diversity. For arts boards in particular, I don't see gender diversity as the main issue. It's more an issue of diversity in general, more economic and ethnic diversity.

Volunteers are almost by definition persons of privilege, people who have both spare time and spare money, so that tends to focus the pool of potential directors when boards are seeking new members. To me, diversity of experience and perspective is what is most important for any board, whether it's in the arts sector or a corporate board. While adding women to a male-dominated board can add some diversity, if all those women have the same socio-economic background, it's not really going to broaden the perspective of the board.

Personally, I don't believe in quotas. I feel they are paternalistic and can result in tokenism, which in my opinion is actually worse than no representation. “Box-ticking” doesn't mean inclusion. Quotas can result in resentment on the part of men and doubt on the part of women if they feel they've been added to a board only because they are female. Funders in the arts and culture sector can make it known that diversity is important by virtue of questions in the applications for funding.

I also feel that women need more encouragement to put themselves forward. Gender parity and pay equity in the corporate world would go a long way to putting women on an even footing with men financially, and things like affordable child care could help with time constraints, because, really, it's money and time that people need to be board volunteers. I'm sure the Liberal Party spent a great deal of time on encouraging the women who form part of the gender-balanced cabinet in the lead-up before 2015, so perhaps some lessons could be learned there.

I also suggest that the same activity is required to ensure greater ethnic diversity on arts boards among arts patrons and audiences. Board mentors can be helpful in assisting new board members in acclimatizing to the culture of a particular organization and the board.

In terms of arts leadership, it seems to be happening a little bit on its own. Search committees are all looking for female candidates.

Each artistic discipline is different. Performing arts organizations have a particularly strong history of women in administrative leadership roles and as volunteers on small and mid-sized boards. As an example, Soulpepper is doing a search for an executive director, and we have 12 people on our long list, five of whom are women.

However, there is more of an issue on the artistic leadership front, specifically in the artistic director role. I think it stems from structural issues in Canada. There are thousands of small organizations spread across the country, only a handful of organizations of scale, and not even many mid-sized organizations, so it's hard for people to gain the experience to move from a small organization to manage a larger one.

People often need to go to other countries to gain that experience, and you hear about a lot of arts boards that end up hiring someone who's non-Canadian because they weren't able to find a Canadian with the skills that are needed. Search committees all want women on the their short list, but there are not a lot of women who have had the relevant experience in Canada because there are just not that many organizations to provide it.

At Soulpepper specifically, we haven't had any issues in recruiting women to the Soulpepper board, but we do need a greater ethnic diversity, and we need to add a younger perspective. The board members all seem to be aging at the same pace.

A lot of arts boards expect people who become board members to become significant donors as well, and that can be a barrier. At Soulpepper, we have a low dollar value of what's expected to be raised or gathered, but in fact we're willing to waive that expectation if there's a potential board member who would be an excellent addition to the board but isn't able to do that financially.

Currently, the Soulpepper Theatre board is 36% female, but 57% of the board leadership roles are held by women, including me as chair, one of two co-chairs, the chair of the governance and nominating committee, and one of the two co-chairs of the human resources committee.

The governance and nominating committee has identified diversity and inclusion as a priority and has committed to achieving gender parity on the board by 2020. Our HR committee is working with KPMG on a diversity and inclusion assessment of the organization. At present, 63% of the senior management staff is female.

Within Soulpepper, the trend is definitely positive. In 2017, Soulpepper issued contracts with 350 individual artists, and 47% of those were women. Over the past 10 years, that ratio has actually hovered between the 45% and 50% range. However, if we look at female artists in leadership roles, such as director or playwright, that number is lower. There is still work to be done, although we're on the right track. In 2011, only 13% of our shows were directed by women. In 2018, of our announced programming to date, which takes us to October, 58% of the shows are directed by women, including the three that are presently on stage. In 2011 only 25% of our resident artists were women, and in 2018 it's 45%.

Perhaps the most important way that we can address the gender diversity issue and diversity in general is by looking to the future. Soulpepper runs what we call the “Soulpepper Academy”, which is a paid residency theatre training program. It plays an important national role in nurturing the next generation of leadership. Over the past decade, we've graduated 53 artists who have gone on to meaningful and impactful careers, 54% of them women, including actors and also producers, designers, directors, and playwrights. In our most recent academy, 75% were women.

We have some suggestions.

One is that we all continue work to educate people on the importance of the arts and culture sector and to explain the economic argument for it, as well as the significant employment it provides and the spinoff economic benefits, so that people understand why it's worthy of continued support.

Next, more training and education programs would be helpful to address the structural issues across the country.

As well, providing scholarships to enable people to study and gain experience abroad would be very helpful, because arts leadership really is a global market and recruiters do look to see where people have received their training.

Also helpful would be financial support for diverse projects. Arts organizations may not be willing to take a financial risk on a project that's not really aligned with their historical presentations, but organizations do need to showcase work from diverse communities in order to encourage people from those communities to come to the organizations and then ultimately join the board.

I have just a couple of other thoughts.

Bill C-25 requirements for the for-profit corporations could be applied to not-for-profit corporations as well, to ensure some transparency in women and compensation.

Finally, it might be helpful if the Not-for-profit Corporations Act could be amended so that boards would be able to provide a small honorarium to the board members, which would help with the feasibility for people from marginalized communities to participate.

Thank you.